Friday, June 13, 2014

K-Tags For Farm Vehicles

By: Maryland Farm Bureau
Recently, the Maryland Farm Bureau was made aware of some confusion regarding renewal of
K-tags for farmer vehicles.  As many of you know, the Maryland Farm Bureau passed policy last year that called for the K-tag radius to be increased from 10 miles to 25 miles.  Our policy also calls for proof of farming to be eligible to receive the farm area vehicle tags.  A bill was introduced and passed in 2014 to do just that - expand the radius to 25 miles and crack down on fraud. 
We recognize that not every farming operation is the same. There are many different types of business structures when it comes to agriculture in Maryland. To encompass all types of farming activity, MFB worked with the MVA to develop at list of documents to show proof of farming activity. Because the bill that passed called for tax documents to prove farming, we focused on the wide-range of IRS forms that are associated with agriculture businesses.  This included the following IRS forms: 
  • IRS Form 1040 Schedule F “Profit or Loss from Farming”
  • IRS Form 1040 Schedule C-EZ “Net Profit from Business”IRS Form 1120  “U. S. Corporation Income Tax Return”
  • IRS Form 1120S “U.S. Income Tax Return for an S Corporation”
  • IRS Form 1065 “U. S. Return of Partnership Income”
  • IRS Form 4835 “Farm Rental Income and Expenses”
The confusion occurs when a farmer wants to submit one of the above IRS form(s) but doesn’t have the vehicle listed on a depreciation schedule. This may be because the vehicle has no value and is only used during certain times of the year to plant or harvest crops. If this happens to be the case for your vehicle(s) and operation, please send an email explaining that the vehicle has been fully depreciated to Matt Teffeau on our staff at .  Matt will serve as your intermediary with the MVA for these special cases.

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